When it comes to Russia, Germany knows how to juggle: It can deliver Moscow a foreign policy slap while also protecting its energy interests.

A case in point is Berlin’s actions this week. It expelled four Russian diplomats to show solidarity with the United Kingdom over the alleged poisoning of a former spy by Russia, but just a day later German authorities gave Russia’s energy giant Gazprom the green light to build the contentious €9.5 billion Nord Stream 2 pipeline through its waters.

For those who hoped that worsening EU-Russia relations would also prompt Germany to rethink, or at least delay, its support for the divisive pipeline project, Berlin's decision was disappointing. “It’s simply sad,” a Polish official said. “It took less than 24 hours for real life to negatively verify political declarations.”

Germany's double game with Russia may help defuse tensions at home between Kremlin skeptics and Moscow-friendly forces in the political and business spheres, but it feeds into a broader policy ambivalence in the EU, which both decries Russian political aggression, but is loath to endanger lucrative economic links.

Glum Central Europe

Poland, the Baltics and some other Eastern European countries have been desperately trying to block the construction of Nord Stream 2. They fear the pipeline, meant to carry 55 billion cubic meters of gas a year from Russia to Germany under the Baltic Sea, would concentrate a huge chunk of Russian gas exports to Europe through one route and leave them vulnerable to Russia’s geopolitical pressure.

That's not the view in Berlin.

During a visit to Poland earlier this month, German Foreign Minister Heiko Maas said that Germany isn't linking Nord Stream 2 and the poisoning of former spy Sergei Skripal.

"Both developments have to be strictly separated," said a spokeswoman for the German ministry of economy and energy. "Our position has always been that Nord Stream 2 is a commercial project promoted by companies, which have to abide by the applicable national and EU rules."

Two German companies, Uniper and Wintershall, financially back the Nord Stream 2 project.

Business ties often shade into personal ones as well. The most glaring example is former German Chancellor Gerhard Schröder, who last year took up the post of independent director at the majority state-owned oil giant Rosneft. He already holds a leadership position in the management of the first Nord Stream pipeline.

“The Russian economy is highly dependent on the income from gas exports to the EU, which creates a strong mutual dependence between us" — Martina Werner, German Socialist MEP

For Germany, the economic relationship with Russia is secondary to long-term strategic considerations. Though certain sectors, such as energy and agriculture, benefit from close commercial ties with Russia, Germany's overall economic links with the country are fairly modest.

In 2017, for example, German exports to Russia totaled just under €26 billion, or about 2 percent of the total. Germany is a much more important market for Russia. Russian exports to the country, which are mostly energy related, totaled €31.5 billion last year, making Germany one of Russia's top three trading partners.

What drives the support of Berlin's political establishment for Nord Stream 2 is a conviction that tethering Germany's energy needs with Russia's economy is the best way to forestall a deeper conflict. Such thinking, widespread in Berlin's foreign policy establishment, is influenced by the legacy of Ostpolitik, the policy of détente that characterized West Germany's approach to the Soviet Union, beginning in the 1970s.

Many Germans credit the policy with both ending the Cold War and for creating the conditions that led to German reunification.

Germany’s support for Nord Stream 2 has been Gazprom’s biggest asset in pushing forward with its plans in the face of resistance from the European Commission and many other EU countries.

“In Germany’s commercial framing of energy issues, this is not a contradiction,” said Marco Giuli, an analyst at the European Policy Center think tank. Balancing political and commercial interests is old hat for Berlin — Germany is also a vocal supporter of sanctions against Russia over its annexation of Crimea while also backing Nord Stream 2, he added.

What makes Germany’s “double approach” stand out is that other EU countries known for their close ties to Moscow, such as Nord Stream 2 supporter Austria, as well as Greece, Cyprus and Bulgaria, chose not to expel any Russian diplomats. Former Austrian Finance Minister Jorg Schelling was appointed a consultant for Gazprom this week.

Germany, the biggest economy in Europe and a crucial trading partner for Russia, is in a different league — so a diplomatic tiff is not enough to endanger a lucrative relationship.

The Russian government, for its part, warned that what it called the "unfriendly step" of Western countries "will not go unnoticed, and we will respond to it." While Moscow did levy countervailing economic measures in response to Western sanctions in 2014 following its aggression in Ukraine, the EU-Russia energy relationship is too important for either side to tamper with.

The reality is that “when it comes to gas politics, Russia is a more reliable partner than in the geopolitical context,” said German Socialist MEP Martina Werner. “The Russian economy is highly dependent on the income from gas exports to the EU, which creates a strong mutual dependence between us. In foreign policy, on the other hand, Russia is much more unpredictable.”

Cautious Brussels

The European Commission is facing a similar dilemma of how to deal with Russia as it handles an ongoing antitrust case against Gazprom, while also expressing disapproval of Moscow's foreign policy.

Brussels is likely to announce a final settlement in the case soon. It is expected to force changes in behavior on the Russian energy champion that will prove contentious in Moscow, but the deal will also allow Gazprom to escape without fines.

“A downward spiral in West-Russia relations might increase the political risk associated to the investment" — Marco Giuli, analyst at the European Policy Center

However, if tensions between Russia and the EU continue to rise, so will the political pressure on Germany and other EU countries to do something about Nord Stream 2, Giuli said.

Denmark, Sweden and Finland have yet to issue their own construction permits for the pipeline.

“A downward spiral in West-Russia relations might increase the political risk associated to the investment,” Giuli said. “At some point the double approach may not be tenable anymore and require Germany to make a choice between aligning to the Western camp, or protecting its business community’s interests.”

Veritas Semper

What a bunch of BS… NS-1 isn’t even close to capacity and Germany claims it needs 2x that to match its energy needs… BS

It’s all back to the ties with czarist Russia in which Germany divided the continent between the two into their own spheres of influence and outright control.

Posted on 3/30/18 | 12:03 PM CET

cinc eur

If I was prone to hyperbole, I’d be ranting about the Molotov-Ribbentrop pact. But I’m not….

Posted on 3/30/18 | 1:24 PM CET

Priscilla du Bleu

@Veritas Detorquator
“It’s all back to the ties with czarist Russia in which Germany divided the continent between the two into their own spheres of influence and outright control”

Oh ooooh …. someone’s is pretty pi**ed that after March 2019, one is downgraded to be a ruletaker of said Germany which – together with Fraance – leads the EU.

See, my love, this happens when one voluntarily ditches a vote, a veto and having a say in club for some ultranationalist delusions of supremacy. And fantasy-cakes, of course.

Posted on 3/30/18 | 1:47 PM CET

J D

@Priscilla du Bleu

France is as relevant in EU as e.g. Portugal. It is louder, more visible, but in the end, its either German projects or those initiated by European Commission and having wide members’ backing that get implemented. This is why confederations simply never work – the strongest member always imposes its will on other members. That is why we need much more EU where EU is really needed and no EU at all elsewhere (instead of a little EU everywhere – I really do not need anyone to tell me as a consumer how a banana should look like; it I do not like it, I won’t buy it).

Posted on 3/30/18 | 3:14 PM CET

maciek maciek

Nord Stream 2 deal is another Ribbentrop-Molotov Pact directly undermining security of Central European countries and exposing whole Europe to German-Russian energy dictatorship.
Those supporting NS 2 are today’s na$$is and commies.
Look at this blue German suprermacist Bleu. :/

Posted on 3/30/18 | 3:32 PM CET

François P

@Veritas Semper

“What a bunch of BS… NS-1 isn’t even close to capacity and Germany claims it needs 2x that to match its energy needs… BS”

In 2017, the Nord Stream Pipeline delivered 51 billion cubic metres (bcm) of natural gas to consumers in the European Union. This means the pipeline system operated at 93 per cent of its annual design capacity of 55 bcm.

Irene Duym

Here is a tip: all politicians worldwide share one objective: play the leading role in an arena dedicated to useless games where one has to defeat the other to survive and become a star.

Posted on 3/30/18 | 6:03 PM CET

John Brown

“When it comes to Russia, Germany knows how to juggle: It can deliver Moscow a foreign policy slap while also protecting its energy interests.”

The Germans just cheat for commercial advantage :

Supplying gas turbines to Crimea against international sanctions.
Not paying 2% of their GDP towards NATO.
Still building lignite (the dirtiest of coal) power stations.
Fitting diesel emissions cheating devices to their vehicles to fraudulently enhance sales.
Using “reseach” funding to subsidise German businesses against EU competition rules.
Etc.

Posted on 3/31/18 | 10:54 AM CET

John Brown

“When it comes to Russia, Germany knows how to juggle: It can deliver Moscow a foreign policy slap while also protecting its energy interests.”

The Germans just cheat for commercial advantage , for example :

Supplying gas turbines to Crimea against international sanctions.
Not paying 2% of their GDP towards NATO.
Still building lignite (the dirtiest of coal) power stations.
Fitting diesel emissions cheating devices to their vehicles to fraudulently enhance sales.
Using “reseach” funding to subsidise German businesses against EU competition rules.
Etc.

Posted on 3/31/18 | 3:32 PM CET

Mark Chapman

“NS-1 isn’t even close to capacity and Germany claims it needs 2x that to match its energy needs… BS ”

That’s a typical response from someone who talks out of an aperture that is customarily say upon. Average usage of Nord Stream I ran at 80% of capacity in 2016, and in 2017 that was increased to 97%. Dreamfluff lightweights like Sijbren de Jong are fond of tossing ‘facts’ out that are no such thing, or citing non-sequiturs such as “Europe has reduced its gas consumption, so it doesn’t need another pipeline”. But Europe’s decline in domestic production more than offsets its economies of use, and if it doesn’t need another pipeline, why does it keep squeaking about the Southern Gas Corridor?

Tell you what – if Europe really doesn’t need Nord Stream II, the best way to stick it to the Russians would be to let them build it, and then don’t use their gas!! That would show them!! After all, if you’re oversupplied with gas, who says you have to use it? Do you have to leave the stove on all day when you’re at work? Of course not.

But European leaders know better, despite what they say. They know very well that soon they will be using every bit of gas they can get through that pipeline. They just want the have-your-cake-and-eat-it solution of Gazprom and partners paying to build the pipeline, and then put it under Brussels’ control.

As for Poland and Ukraine, their energetic opposition owes everything to (a) losing transit fees whereby they milked Russia for using their pipelines, and (b) losing the luxury of throwing a tantrum and Russia having to pay attention and placate them in order to keep using their pipelines. Leverage gone; done and dusted.

It makes no difference to Europeans if their gas arrives via Ukraine or Germany. But it makes a lot of difference to European leaders, who can no longer use Ukraine to stir up trouble for Russia whenever they feel like it. Once Russia doesn’t need Ukraine as a transit country, it can collapse for all Russia cares. Unless Europe feels like keeping it alive on constant – and expensive – life support.

Posted on 4/1/18 | 5:00 AM CET

Chris Rock

Why Germany ? Why Germany to lead EU? Did people fail to recall what they did in in WW2? Everybody damning Russia, and is not communist anymore… But Germany? Germans killed millions of innocent people! What a short memory! Why trust them with anything?

Posted on 4/1/18 | 5:12 AM CET

Mark Chapman

“If I was prone to hyperbole, I’d be ranting about the Molotov-Ribbentrop pact. But I’m not….”

Ah, yes; the Molotov-Ribbentrop pact – that always comes up whenever some westerner who is apparently prone to neither hyperbole or research wants to showcase that Putin is just like Hitler.

Say; speaking of Hitler, did you know Great Britain explored the possibility of a non-aggression pact with Hitler, before the Molotov Ribbentrop pact was concluded? True story – look it up. The Molotov-Ribbentrop pact was signed August 23rd, 1939. But between the 8th and 21st of that same month, discussions in Germany between Rudolph Hesse and England’s Sir Horace Wilson explored a British appeasement offer which would recognize German hegemony in Eastern and Central Europe, and the allocation to the Führer of some African territories under a system of international cooperation. The deal would likely have been sealed – but Hitler perceived the British would not fight for Danzig, and attacked anyway.

You can read all about it in Scott Newton’s “Profits of Peace: the Political Economy of Anglo-German Appeasement”. Hey, who knew? The British government is just like Hitler.

More to the point, the Soviet Union perceived that its supposed allies were going to betray it, and concluded its own pact so as not be left fighting Hitler while the British sat on their hands.

Posted on 4/1/18 | 5:27 AM CET

aussie 43

Western Europe and Russia are natural trading partners. Stop the anti-Russian nonsense and start to co-operate. Both of you will benefit.

Posted on 4/1/18 | 7:59 AM CET

Klaus Wekx

@aussie 43
“Western Europe and Russia are natural trading partners.”

Germany and Russia are NOT natural trading partners but they are natural enemies.
German industry is far too dependant on a Russia that is happy to assainate people who oppose it. When Russia comes, do you think they will leave the gas turned on?
No, they will turn it off and prevent the ability of our industries to defend us.
Yet Merkel encorages and fosters the “special relationship” that she has with Russia.
Why are we being played into the hands of those who are jealous and want to steal what we have?

Posted on 4/1/18 | 9:16 AM CET

Klaus Wekx

And we all know who it is that Trump is targetting.
People will refuse to deal with us if we dont play fair within the EU and outside.
Merkel is pushing Germanys alignment with Russia instead of US, UK. This will only backfire on the whole of the EU. We should choose our friends more carefully.
Canada is seen internationally as a vassal state of the US, Germany should not be seen as a vassal state and a slave to Russian energy. We should not allow Merkel to transform Germany and the EU into Russia’s little Mexico.

Posted on 4/1/18 | 9:50 AM CET

Donal O'Brien

Att Chris Rock

Germany slaughtered 29 million in WW 1

And slaughtered 58 million in WW 2

I know BALLs du bleu
Will come back with a nonsensical comment
But the above figures could be even higher

Germany is in the EU for the benefit of Germany only
It don’t matter what they say

The word in Brussels is CONTROL
of the people of EUROPE by Germany

The know they cant do it by force so now there doing it by slight of hand
There a dispicable race

But lets see
Long road without a twist

Cheers for Brexit
Allways
Donal O’Brien

Posted on 4/2/18 | 8:39 AM CET

f c

Nothing new,

Just another episode of close and friendly German-Russian cooperation just like Na2i German–S0viet Pact of Aggression signed in Moscow on 23 August 1939.
In addition to stipulations of non-aggression, the treaty included a secret protocol that divided territories of Poland, Lithuania, Latvia, Estonia, Finland, and Romania into German and S0viet “spheres of influence”, anticipating “territorial and political rearrangements” of these countries. Thereafter, Germany invaded Poland on 1 September 1939. S0viet Union leader Joseph Stalin ordered the S0viet invasion of Poland on 17 September.
In March 1940, parts of the Karelia and Salla regions in Finland were annexed by the Soviet Union after the Winter War. This was followed by Soviet annexations of Estonia, Latvia, Lithuania, and parts of Romania (Bessarabia, Northern Bukovina, and the Hertza region).

What else would you expect today with former German chancellor, high ranking officials and German business leaders in Putin’s pocket ?!?